We publish no single base value for IBM. Our valuation methods put it between $162.90 and $271.62 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $271.62 | +11.0% | free cash flow $14.34bn, growth 4.7% for 5 years, then fading to 3% over 5 more, discounted at 9.32%; stress floor $179.58 |
| Exit multiple (P/E) | $162.90 | -33.4% | earnings per share $12.42 valued at 16.87× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.78 (5 years of monthly returns against the S&P 500; standard error 0.25) |
| Peer beta | 1.34 (median of 73 S&P 500 Information Technology companies) |
| Blend of own and peers | 0.89 (80% own, 20% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.93 (0.67 × 0.89 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 9.32% |
Free cash flow grows 4.70% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $14.34bn | — | — |
| Year 1 | 4.70% | $15.02bn | 0.9148 | $13.74bn |
| Year 2 | 4.70% | $15.72bn | 0.8368 | $13.16bn |
| Year 3 | 4.70% | $16.46bn | 0.7655 | $12.60bn |
| Year 4 | 4.70% | $17.24bn | 0.7003 | $12.07bn |
| Year 5 | 4.70% | $18.05bn | 0.6406 | $11.56bn |
| Year 6 | 4.42% | $18.84bn | 0.5860 | $11.04bn |
| Year 7 | 4.13% | $19.62bn | 0.5361 | $10.52bn |
| Year 8 | 3.85% | $20.38bn | 0.4904 | $9.99bn |
| Year 9 | 3.57% | $21.10bn | 0.4486 | $9.47bn |
| Year 10 | 3.28% | $21.80bn | 0.4104 | $8.95bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (9.32% − 3%) | $355.51bn |
| Terminal value in today's money | $145.90bn |
| Present value of years 1–10 | $113.09bn |
| Total present value | $259.00bn |
| Shares outstanding | 953.52m |
| Value per share = total ÷ shares | $271.62 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth -0.3% | Growth 4.7% | Growth 9.7% |
|---|---|---|---|
| 8.32% | $237.62 | $323.66 | — |
| 9.32% | $201.21 | $271.62 | — |
| 10.32% | $174.70 | $233.84 | — |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.78 | 8.64% | $304.72 |
| Peer beta | 1.34 | 11.16% | $209.17 |
| Adjusted beta (used) | 0.93 | 9.32% | $271.62 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $12.42 |
| Year 1 | 4.70% | $13.01 |
| Year 2 | 4.19% | $13.55 |
| Year 3 | 3.83% | $14.07 |
| Year 4 | 3.58% | $14.58 |
| Year 5 | 3.41% | $15.07 |
| Earnings per share in year 5 | $15.07 |
| Exit P/E (the stock's own median P/E) | 16.87× |
| Value in 5 years = earnings × P/E | $254.29 |
| Discounted at 9.32% over 5 years: ÷ 1.5610 | $162.90 |
We publish no single base value for IBM. Our valuation methods put it between $162.90 and $271.62 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $177.00 and a 10% chance it is above $372.95 in a year; a 57% chance it is higher than today's $244.67, from 28.93% volatility. The simulation assumes the price drifts up at our discount rate of 9.32% a year.
At $244.67 the price implies free cash flow growing 3.0% a year for five years and then fading toward 3% over five more; its revenue has grown 4.7%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $222.64 | — |
| 9 Oct 2026 | $227.13 | — |
| 16 Oct 2026 | $232.14 | — |
| 23 Oct 2026 | $253.56 | — |
| 30 Oct 2026 | $257.81 | — |
| 6 Nov 2026 | $245.00 | — |
| 12 Nov 2026 | $244.67 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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